This is not overconfidence just a method of analyzing that comes when you have dealt with lots of startups. And 8 out of 10 times I am right.

In the challenging world of startups, where success hangs by a thread, it takes a seasoned eye to discern the promising ventures from the destined-to-fail ones. Drawing on my extensive experience with startups, I have honed my ability to predict a startup’s fate.

We all need to understand that a startup is as tough as rocket science. A single mistake can sink your entire ship. Whenever someone points out a mistake with my business model I welcome those with an open heart.

While writing this blog, I am going to be blunt with my words.

In today’s blogs, we discuss my experience and how it helped me analyze stuff. Before we begin, I would love to introduce you to my startup. At Surge Startup, we help companies build their SaaS products and consult them with the toughest product challenges.

Here, I share my insights on key indicators that can make or break a startup.

Burning Personal Funds Without Profit:

Financial prudence is key in the startup realm. Entrepreneurs pouring their funds into a venture without a clear path to profitability is a red flag.

One of my previous clients was unable to make a profit yet he had his ego high enough to seek funding. Often when startups are unable to generate profit investors take a big chunk of shares. Yet it’s still a good option to sell your house for the startup.

The investors might take a big chunk of your shares but they are also gonna guide you on how to generate profit from your product. At the end of the day what matters most is how much money your startup can generate.

If you are of the mindset “I want to change the world, money doesn’t matter to me”. Then Congrats! Even a 12-year-old can predict your startup’s future. I feel sad when I see startups fail. So please dont have this mindset.

When selling your product, adopt a business mindset. If funding is needed and investors are ready, seize the opportunity and allocate resources where necessary.

PS: It is crucial to select an investor who is compatible with your goals and vision. Some investors may prioritize returns over your product’s success, so it is essential to ensure that your investor shares your vision. Don’t worry about giving up a large percentage of shares if it means increasing your startup’s valuation from thousands to millions through funding.

Startups must focus on sustainable business models, revenue generation, and cost efficiency. Burning through personal savings without tangible returns jeopardizes the founders’ financial stability and the startup’s longevity.

Egoistic Co-Founders and Bad Relations:

It’s common for CEOs in their 40s-50s with no startup experience to encounter this issue. However, it’s not a universal problem. Sometimes, founders struggle to receive feedback constructively. Instead of treating it as a professional matter, they take it as a personal attack.

Once I was leading a startup where the CEO loved to micro-manage. Always doubting the team of their working hours, made the team skeptical about the work culture. This resulted in all the founding engineers leaving the team.

Successful startups thrive on collaboration, teamwork, and mutual respect. When co-founders let their egos take the reins and foster toxic relationships, it’s a recipe for disaster. Ego clashes hinder effective communication and decision-making, leading to a dysfunctional work environment. A healthy startup ecosystem relies on trust and synergy among co-founders to navigate challenges collectively.

If your ego causes problems and a founding member leaves the team, it can lead to slower development. This is because the new hire would need time to understand the entire setup, which usually takes around 3-4 months for a developer to become fully familiar with a SaaS setup.

This means now the founders have to pay more to developers with slower development. This time will be utilized by your competitors to beat you in the game.

Lack of Quick Product Testing:

Just recently my team consulted a startup. Their team took 1.5 years to launch the beta version of their product. Remember the sooner you test, the sooner you understand users. Henceforth, the better is your product.

If I see a product that is taking too long to launch its first version then it's a big red flag. Dont wait for a stable version. Even if your product is 70% stable, let it out for the users to test. This would help you shape your product to its best.

In the fast-paced world of startups, time is of the essence. Entrepreneurs who delay testing their products miss valuable feedback opportunities. Rapid prototyping and product testing are essential for identifying flaws, understanding user needs, and iterating swiftly. Startups that drag their feet in this crucial phase risk falling behind competitors and losing market relevance.

Inability to Make Quick Decisions:

If you are in a competitive market it's quite important to make quick decisions. Your competitors might be building the same feature and whoever launches the feature first captures more audience.

Indecision can paralyze a startup. While making wrong decisions is part of the entrepreneurial journey, hesitating indefinitely is far worse. Timely decisions, even if imperfect, keep the momentum going. Startups need leaders who can assess situations swiftly, weigh options, and make choices decisively. Delayed decisions can lead to missed opportunities and stagnation.

Inexperienced Founders Unwilling to Learn:

People who are unwilling to take feedback often fall into the trap of losing the market. We as founders need to understand that we are not perfect. Our decisions might have tons of flaws.

Entrepreneurship demands continuous learning. Founders lacking startup experience who are resistant to learning from failures and industry best practices face an uphill battle. Successful startups require adaptable leaders who embrace new ideas, learn from mistakes, and continuously evolve their strategies.

However, founders who don’t consult with their team or experts generally tend to fail. We often think we know everything but that’s not true. Even if you might have the ability to learn something and implement it. This might cost you in terms of time. It would take time for you to perfect that skill.

So it’s best sometimes to learn new skills or outsource them.

The fate of a startup often hinges on the founders’ mindset, decision-making agility, financial acumen, and openness to learning. By recognizing these warning signs, entrepreneurs can steer their ventures toward success, avoiding common pitfalls that plague startups in their infancy. Remember, a thriving startup ecosystem is built on humility, resilience, and a willingness to evolve.

At Surge Startup, we help companies in building their SaaS products and help them with their toughest product challenges. If made it till the end then do consider subscribing to our page.

If you think there’s an opportunity where we can collaborate feel free to reach me at

abhi@surgestartup.com or DM me at
https://www.linkedin.com/in/abhishekpatnaik77/

Will see you again with another great blog. Till that time take care.
Peace!